LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 3183
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JUNE 8, 2026
SUMMARY
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Synopsis: |
Modifies various provisions of State’s renewable energy incentive programs; requires electric public utilities to consider interconnection applications for certain solar projects. |
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Type of Impact: |
Annual State expenditure increase. Indeterminate impact on local government finances. |
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Agencies Affected: |
Board of Public Utilities, Department of Environmental Protection, and municipalities. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Annual |
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State Expenditure Increase |
Indeterminate |
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Local Fiscal Impact |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that the bill would result in an annual expenditure increase by the State and local government units in the form of increased electricity costs, as the costs of solar incentives are financed through electricity rates.
· The OLS does not have an informational basis on which to estimate how many solar facilities will qualify for renewable energy incentives under the bill, the value of those incentives, and the specific impact of those incentives on utility rates.
· To the extent that the bill makes it easier for contacting units subject to the provisions of the Local Public Contracts Law to purchase certain types of renewable energy credits, these entities may experience a reduction in administrative costs associated with the public contracting process. However, these cost savings would be offset by the cost of purchasing the credits.
BILL DESCRIPTION
The bill modifies various provisions of the State’s renewable energy incentive programs and requires electric public utilities to interconnect certain solar projects.
The bill authorizes, upon petition to the Board of Public Utilities, the co-location of solar facilities that are either registered, or seeking registration or participation in, the SREC-II program, including the administratively determined portion and the competitive solicitation incentive portion, the community solar program, or any combination of those programs. Under the bill, “co-location” means the siting of two or more SREC-II eligible program facilities on the same property or contiguous properties. The bill provides that solar facilities with a capacity of up to 20 megawatts that are located on landfills, brownfields, contaminated sites, or mining sites would be eligible for registration in the community solar program until December 31, 2028.
The bill provides that a project sited on a commercial or industrial rooftop, landfill, brownfield, contaminated site, or mining site that is participating in the community solar program or the remote net metering program would have not less than 33 months from the date of registration in the applicable program to achieve commercial operation. The bill allows projects that do not meet the deadline to re-register, regardless of whether the capacity limits for the program have been reached.
The bill amends current law to provide that certain renewable energy facilities that are parcels of land comprising 10 or more acres are permitted uses in municipal industrial districts and to include energy storage facilities within the definition of “renewable energy facility” for that purpose. The bill also amends current law to provide that solar facilities sited on landfills, closed resource extraction operations, battery storage, and renewable energy facilities are permitted uses within every municipality.
The bill exempts the purchase of remote net metering credits, similar renewable energy credits, or renewable energy production credits pursuant to a program established by the board from the public bidding requirements of the Local Public Contracts Law.
Finally, the bill amends the statute governing the State’s remote net metering program to increase the maximum size of projects allowed in the program from five megawatts in direct current to 20 megawatts in alternating current. The bill also modifies the types of properties suitable to host remote net metering solar facilities to include contaminated sites, landfills, and mining sites, subject to certain environmental regulations adopted by the Department of Environmental Protection.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in an increase in State expenditures and have an indeterminate impact on local finances. Solar incentives are financed through electricity rates charged to utility ratepayers. To the extent that the bill allows additional energy projects to qualify for renewable energy incentives, the State and local government units will incur additional expenditures due to increased electricity costs. The OLS does not have an informational basis on which to estimate how many solar facilities will qualify for renewable energy incentives under the bill, the value of those incentives, and the specific impact of those incentives on utility rates.
The OLS notes that the bill requires the Department of Environmental Protection to approve, prior to the start of construction, a remedial action work plan for a remote net metering project on a contaminated site, landfill, or mining site. This provision would likely lead to marginal annual expenditure increases from the General Fund, but would not likely require additional staff.
To the extent that the bill makes it easier for contacting units subject to the provisions of the Local Public Contracts Law to purchase remote net metering credits, similar renewable energy credits, or other renewable energy production credits, these entities may experience a reduction in administrative costs associated with the public contracting process. However, these cost savings would be offset by the cost of purchasing these credits. The OLS notes that current law does not require any of these contracting units to purchase remote net metering credits, similar renewable energy credits, or other renewable energy production credits.
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Section: |
Revenue, Finance, and Appropriations |
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Analyst: |
Staff Fiscal and Budget Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).